Special Questions

Texas Manufacturing Outlook Survey

Data were collected April 14–22, and 67 Texas manufacturers responded to the survey.

NOTE: 66 responses.

The following prompt was given to those positively impacted.

• Consumers are trying to source more products domestically.
• Raw material prices spiked quickly, but uncertainty on supply has meant some ability to increase pricing.

• Aluminum prices have risen substantially due to approximately 10 percent of the world’s primary aluminum supply coming from the Middle East, traveling via ship though the Strait of Hormuz. Also, two primary reduction smelters of aluminum were bombed by Iran, curtailing a significant portion of the production for that region.

• We maintain and coat tools used downhole [in oil and gas wells].

• Price of oil.

• We are seeing an increase in our domestic manufacturing for oilfield services/oil and gas as a result of the international conflict and uncertainty around delivery of natural resources. We believe some of this increase will remain after the Strait of Hormuz [reopens] and conflict is resolved; however, some will be shifted back to international sources.

The following questions were posed to those negatively impacted.

NOTES: 23 responses. This question was only posed to those negatively impacted by the Iran war.

NOTES: 23 responses. This question was only posed to those negatively impacted by the Iran war.

Survey respondents were given the opportunity to also provide comments, which can be found in the Comments tab above.

Texas Service Sector Outlook Survey

Data were collected April 14–22, and 241 Texas business executives responded to the survey.

NOTE: 237 responses.

The following prompt was given to those positively impacted.

• More producer interest in additional connections to pipelines. 

• More companies are looking to move to the U.S., Texas and the region.

• The Middle East looks like an unreliable source of liquid energy at the moment, and our customers have stepped in to overproduce as partial replacement for Middle East losses.

• The decisiveness of the administration to rid the world of a terror threat is causing positive expectations of the economy for later in the year.

• Increased interest from clients to protect their plants from attacks.
• I think in general the energy industry in Texas sees higher prices as a good thing.
• Hydrocarbon and related products show entanglement with effects in China. As others seek to understand or counter threats from China, our business grows.
• Opportunities for significant economic opportunities.
• We added new defense industry customers. Our infrastructure software is a core commercial need, not open source, and is immune from AI creating new versions. Further, we expect to get more sales as the defense industry uses more drones and unmanned craft and as AI data centers and giant new semiconductor factories need infrastructure software like ours to run daily operations.

The following questions were posed to those negatively impacted.

NOTES: 120 responses. This question was only posed to those negatively impacted by the Iran war.

NOTES: 120 responses. This question was only posed to those negatively impacted by the Iran war.

Survey respondents were given the opportunity to also provide comments, which can be found in the Comments tab above.

Special Questions Comments

Survey participants are given the opportunity to submit comments. Some comments have been edited for grammar and clarity.

• We manufacture military electronic components and assemblies. The flow-through of contracts to replace expended munitions usually takes months to reach us, so any impact from the Iran war will probably reach us in the third or fourth quarter of this year.
• We still haven’t seen the expected impact from higher diesel prices reflected in raw materials prices. We expect to see this if the war were to continue and diesel prices remain elevated.

• As long as it does not affect coffee pricing, we are good. Long term, it should all be worth it and help our business.

• We service oil companies, and they have been cutting back on employees. That has directly impacted in a positive manner our business outlook. They have cut the oil industry’s most knowledgeable employees and replaced them with new, inexperienced employees. This has been a boon to our everyday business for callouts, which produces a high rate of return for our company. We don’t see this abating any time soon.

• Aluminum prices have risen substantially due to approximately 10 percent of the world’s primary aluminum supply coming from the Middle East, traveling via ship though the Strait of Hormuz. Also, two primary reduction smelters of aluminum were bombed by Iran, curtailing a significant portion of the production for that region. Prices should drop when the strait is fully back open, but the lost production will more than likely keep prices up somewhat.

• We use a lot of fuel. The prices are affecting our margins, but a nuclear-armed Iran would be significantly worse. High interest rates are also affecting our market.

• Any impact on us would be via its impact on the stock market and interest rates, which affect us (cosmetic dentistry) by reducing disposable income needed to pay for cosmetics.

• I hope and pray the Iran war solves a 47-year problem that has caused so much uncertainty; however, it is causing its own uncertainty over general business activity.
• My vendors have not begun charging a surcharge. However, if the Iran war continues, I expect a surcharge coming. My customer count has increased slightly, but sales have remained flat. Customers are trading down on menu items. Increased inflation will put pressure on customers’ buying. I expect some restaurants may close their doors because of the inflation cost.

• I recently saw a chart that showed oil price shocks starting with the OPEC embargo in 1973. Every shock (six instances prior to 2026) resulted in a recession. It’s hard for me to imagine this current conflict will sidestep a recession if it drags on longer than six months. All of the oil shocks on the list were up to 24 months in duration, and most of them were longer than 36 months. One significant difference this time around is that we’re more energy-independent in the U.S., and we also produce a lot more energy from sources other than oil (wind, solar). Ironically, we’re also seeing tremendous demand from AI/data centers that want to connect to the grid, so the offset won’t be as helpful. If Texas power producers are spending more on gas and oil to fire the generators, it’s inevitable those higher costs will be passed along at some point.

• We are intentionally reducing inventory.

• My customers haven’t spoken much about it. I know if the prices of other items go up, then the likelihood of buying new clothes will go down.
• We sell propane, gasoline and diesel. We anticipate that selling prices will fall back to previous levels when the Iran war stops.

• The real impact will be on the rebuild of liquified natural gas [production infrastructure] and refineries that have been hit. This will have to wait for a ceasefire that holds for a year before any real reconstruction occurs.
• Uncertainty is creating anxiety among our clients, and they are holding back on additional investments until the conflict concludes.
• The war seems like a real variable. Right now, I think most of our clients feel that it is a short-term problem and are not slowing projects down. I suspect if oil prices stay high through the summer, that will change.
• At this point, there has not been an impact. Worth mentioning, one of our markets is working with Israeli companies that are scaling in the U.S., helping them hire their U.S. employees. Although there are a lot of disruptions in Israel, business has not stalled at all.
• We are in real estate, so uncertainty causes a slowdown over time.
• Consumer confidence and expenditures seem to be slowing down due to the Iran war uncertainty.
• There is continuous and more uncertainty due to the current administration.

• The uncertainty in the Gulf coupled with labor shortages, mainly for construction and buildout materials and time, is having a significant impact on the downside.

• We have had to increase pricing a little due to fuel costs.